Pass The 65: A PLAIN ENGLISH EXPLANATION TO HELP YOU PASS THE SERIES 65 EXAM - UPDATED FOR 2017

The General Partner has a “fiduciary relationship” to the LPs, which means that the GP must put the LPs’ needs first. In legal terms, the GP’s fiduciary duty is “two-pronged,” meaning he has a duty of loyalty and a duty of good faith. His duty of loyalty means he can’t compete with the partnership. His duty of good faith means he has to do whatever

For stocks a round lot is 100 shares. So if a market maker says their quote is 20.00–20.11, they stand ready to buy 100 shares at $20.00 or sell 100 shares at $20.11. The difference between where they buy and where they sell is called the spread. Broker-dealers can act as brokers, whereby they charge commissions, or they can act as principals in th

The firm just needs to have the SEC send the state regulators a copy of Form ADV and all required schedules and pay a notice filing fee. This is done through the convenient IARD system. The state can also demand a “consent to service of process.”

Proponents of the Efficient Market Hypothesis believe that prices for securities are the result of investors all implementing the information available to them in a rational manner. This actually seems to hold true for most market situations over the long-term. However, to explain anomalies such as speculative bubbles in anything from Dutch tulips

Corporate bond interest is taxable in states that have an income tax, and—believe it or not—even a few cities tax the corporate bond interest that their residents earn. GNMA, FNMA, and FHLMC are taxable at the federal, state, and local levels, also, just like corporate bonds.

Note that of the three main tools of monetary policy changing the reserve requirement is the most drastic measure and, therefore, the tool used least often by the Federal Reserve.

A regressive tax is flat. A list of regressive taxes would include sales, gas, payroll, and excise taxes. Everybody pays the same rate there. When you check out your items at Walmart, the cashier doesn’t ask you your marginal tax bracket before giving you your total, right? No, it’s a flat tax.

The death benefit is included in the annuitant’s estate for estate tax purposes, and the beneficiary would have to pay ordinary income tax on anything above the cost basis. If the husband bought the annuity for $50,000, and it’s now worth $60,000, she’ll receive $60,000 and pay ordinary income rates on the $10,000 of earnings.

Now the SEC requires advisers to drop the check-box format and use a narrative, “Plain English” style when creating the disclosure brochure. As the SEC explains, advisers must now: • Use Plain English. • Use a narrative form as opposed to the former check-box approach. • Add a table of contents with the disclosure items listed in the same order as

When selling variable insurance policies, the rep needs to remember that these are insurance policies first and foremost. You can discuss the benefits of investing in the subaccounts, but you can't present these insurance policies primarily as investment vehicles. Primarily, they're to be sold for the death benefit. They also offer the opportunity